Saadia Mazhar,
The strength of the Pakistan-China relations heavily rely on the future of the China-Pakistan Economic Corridor (CPEC), especially with a shift in governments. Western media has been critical of the project; however time has proved that CPEC has provided Pakistan with all kinds of benefits in energy, GDP growth and employment ratios. Furthermore, with the development of CPEC’s industrial zones, more and more investment can be expected from abroad, which will take
Pakistan’s economy to a newer level, especially with the rise of global value chains. In the future, the project will play a key role in boosting regional cooperation, trade and industrial development. Since the official launch of the China Pakistan Economic Corridor(CPEC) in May 2013, the corridor construction has progressed rapidly during these five years and it has been changing with each passing day.
People from all walks of life in Pakistan witnessed the positive changes brought about by the construction of CPEC to Pakistan’s domestic economy and society and also personally experienced the convenience and benefits brought by the corridor construction project. The Pakistani and Chinese peoples have reason to believe that the Pakistan-China consensus in the new era will not be disturbed by all kinds of “clouds” from time to time. The two governments and people will march
forward, cooperate sincerely and look forward to helping each other to further promote both the countries.
Pakistani domestic experts also said that China is currently Pakistan’s largest investor and largest trading partner, bringing rich and positive possibilities for Pakistan’s economic development and improvement of people’s livelihood. With the deepening of the construction of the CPEC, it will attract more and more capital from inside and outside the country to invest in Pakistan. Pakistan is also expected to realize its location potential and advantages and become the core of interconnection in South Asia. Infrastructure construction is a basic element of a country’s economic growth. The rapid economic growth, the cultivation of industrial environment and the improvement of people’s well-being are rooted in a solid infrastructure network, and the shortage of infrastructure is precisely the bottleneck of Pakistan’s economic development.
The main four components of CPEC are Gwadar port, Energy sector development, Communication infrastructure and Industrial development. Pakistan is lacking in all the three sectors (energy,
communication and infrastructure), which are the most looked-for components to build up the economy, in order to make some notable place in the global economic race. Initially, the CPEC was amounting 46 billion USD among which the US $33.178 billion is allocated to the Energy sector, the most fruitful share. US $11.83 billion has been assigned to Communication infrastructure and the US $ 792 Million is for the development of Gwadar port and city. And now it has expanded up to 52 billion USD. One of the main modules of CPEC is building of Special Economic Zones (SEZs). There will be 26 SEZs throughout the country. Each SEZ will target specific goods and services depending on the accessibility of workforce and raw material locally. This specialization will lead to ‘economy of scale’ and this efficient production will increase our exports because of the low-cost production.
Strengthened local industry discourages imports, currently PKR 470,038 million and PKR 180,899 million exports in contrast. These SEZs will play the ‘game changer’ role in thinning the trade deficit. Foreign Direct Investment (FDI) is the most obligatory economic indicator for Pakistan in order to boost up the economy. In FY 2015-16, Pakistan received USD 1016.3 million compared to 963.8 million, which showed 167% increase. It is probable that CPEC will trigger the FDI up to USD 150 billion and with CPEC Pakistan is strengthening the prerequisites to entice FDI i.e. regional connectivity, law and order and macroeconomic indicators stability. The USD 11.83 billion is to be spent on the communication infrastructure to enhance regional connectivity and the Pakistan has
seen a positive signal in maintaining law and order situation as the Terrorism index showed the decrease to 8.61 from 9.07 in contrast. The said factors will play the role of catalyst to fascinate FDI.
Unemployment is one of the problematic indicators these days, but the good sign is that CPEC will inject up to 2,320,000 jobs into the job market . Due to which the brain drain will come to its end and the knowledge will be employed within the border. Meanwhile, Baluchistan, considered as one of the most under-developed provinces, will
develop and would become the economic hub of Asia with the functioning of Gwadar port. The port will become a facilitator for the development of Makran Coast and unlock the potential for tourism.
A gigantic amount of investment and development reforms are knocking at the door step of Baluchistan and these steps are the most attractive tools to inject FDI into this region. The most important prerequisite to latch FDI is the development of Free Zone a Gwadar. This free zone includes 2,280 acres of Gwadar port free zone while Industrial zone occupy 3,000 acres, which is about to inspire the FDI by a substantial amount and will lead to developing the under-developed province with some extra pace. Furthermore, the tourism is one of the most important factors in taking off one’s economy and Baluchistan is blessed with the majestic landscapes and breathtaking
sceneries which are going to be exposed soon to the foreigners and the Prime Minister Imran Khan also believes in increasing and prompting tourism all over the country. and the construction of Gwadar International Airport is going to make an end to the cut-off and communication gap between Baluchistan with rest of the world. Under the CPEC umbrella, the fishing industry got some share because the coastal population mostly depends upon fishery and the up gradation and development of fishing industry will open up paths for the locals to enhance their private business.
The CPEC is not only a win-win situation for both Pakistan and China but also it is in the benefit for Central Asia and the Middle East , and has got more importance after the investment by Saudi Arabia in Oil Refinery in Gawadar. The mega project will alleviate the growth rate by 2.2%. We are almost done with the energy shortfall and we are about to meet the prerequisites of FDI. And the most important development is the takeoff of Baluchistan’s groundwork. The SEZs will take off our
Industry, so looking with a bird eye; we can conclude that when the wheel will start moving on CPEC, growth and prosperity will follow.